1. Akshay Masand's Avatar

    Apple supplier, NXP, which provides near-field communications and motion processing hardware for Apple recently announced that it will be spending $11.8 billion to acquire its rival firm, Freescale Semiconductor, which is a seminal semiconductor manufacturer and another one of Apple’s longtime suppliers. NXP is set to pay $6.25M in cash and 0.3521 shares of NXP stock for each share of Freescale stock – a move which values Freescale at $11.8 Billion. Following the move, which will be funded with $1 billion in cash and a $1 billion debt offering along with the NXP shares, the combined enterprise is set to be worth more than $40 billion.

    The CEO of NXP, Richard Clemmer, had the following to say regarding the matter:

    Today's announcement is a transformative step in our objective to become the industry leader in high performance mixed signal solutions. The combination of NXP and Freescale creates an industry powerhouse focused on the high growth opportunities in the Smarter World.
    For those of you who didn’t know, NXP used to be a unit of the Dutch electronics giant, Philips. The company is one of the co-inventors of NFC and continues to remain a leader in the industry. The company supplies the NFC hardware that is found in the current iPhone lineup as well as the M-series motion coprocessors that debuted with the iPhone 5S. On the other hand, Freescale is one of the oldest semiconductor manufacturers in the world. The company first started selling chips to Apple in the 1980s as a division of Motorola. Furthermore, the famous Motorola 68000 which powered the original Mac also came from that group. Freescale has continued as an Apple supplier until Mac switched to Intel’s x86 architecture in 2006.

    Over the past few years, both NXP and Freescale have had an increasingly growing rivalry with the latter being held back by debt following its acquisition by a consortium of private equity groups in 2006. Freescale ended up unloading patents as part of its plan to alleviate some of the financial obligations and Apple eventually ended up purchasing more than 200 foundational wireless communications patents from the firm back in 2011. With Freescale now being acquired by NXP, we’ll have to see how this move affects the industry and ultimately how the move affects Apple.

    Source: AppleInsider

    Twitter: @AkshayMasand
    2015-03-03 03:32 AM